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Loveland looks at ways to make city friendlier for new small businesses

Entrepreneurs fault city for 'arbitrary' code enforcement

By Julia Rentsch

Reporter-Herald Staff Writer

Posted:
01/20/2018 08:56:50 PM MST

Sara Turner, owner of Studio Vino Paint & Sip, poses for a photo in her new space in the Promenade Shops at Centerra Friday, Jan. 19, 2018, in east Loveland. Turner said she did very minor renovations in her new space, including a fresh coat of paint on the walls and removing two dressing rooms, but still had to go through a lengthy permitting process through the city. (Jenny Sparks / Loveland Reporter-Herald)

Correction: The effort to open Wooden Mountain Bouldering Gym is being spearheaded by a third partner, Brian Stefanovic, in addition to Evan Mann and Adam Lum. Additionally, the fire suppression system installation the city required in the second building Sara Turner looked at downtown to relocate Studio Vino would be paid for by the building's owner. Clarification: "Heel Hook Harry" did not explicitly refer to a person's private parts being crushed in a vice in the video updating Wooden Mountain fans on progress, instead referring to "a sensitive body part," and a person's "hopes, dreams, goals and bank account."

The Wooden Mountain Bouldering Gym, originally slated to open for business in September 2016, is on its third try to open up in Loveland.

Baffled by complicated building codes and surprised with five-figure fee charges, the gym's team, led by Loveland residents Adam Lum and Evan Mann, tried a new tactic last December: A direct appeal to the Loveland City Council.

Mann's comments before council brought the gym's difficulties into the public view, but in response to complaints from local entrepreneurs, city staff say they have been working for several weeks behind the scenes on improvements to the process small business owners go through before they open.

Next week, Chief Building Official John Schumacher will present a discussion of proposed amendments to the city's building codes to council. Discussion of the small business environment will also be on the agenda at Saturday's annual City Council retreat.

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Wooden Mountain's story

On a page of the Wooden Mountain website dedicated to his appeal to council, Mann wrote about the primary reasons he and his partners decided to try to open the gym.

Mann wrote that a primary goal for the gym was to offer local kids something constructive and healthy to do in their free time.

"My wife grew up in Loveland," Mann wrote. "She remembers the lack of things to do in Loveland as a high school student. Today, we see kids hanging out at playgrounds and loitering about with boredom, smoking cigarettes, idle. One of our primary business goals is to catch these kids and get them hooked on climbing."

Both Mann and Lum are, themselves, avid climbers, and said they lamented Loveland's lack of a bouldering gym upon deciding to move back to the city about four years ago.

Mann spoke before council Dec. 19 about the difficulties he and his partners have experienced attempting to open the gym in Loveland.

Two and a half years ago, Mann and Lum made their first attempt to open Wooden Mountain. The warehouse space they leased was ultimately found to be too small at only 2,000 square feet, and a lack of parking caused the city to tell them they could not proceed.

On a second attempt, the two found a much larger building at 1531 E 11th St., and signed a lease for 7,500 square feet of potential gym space, and hired an architect, an engineer and contracted with the company who would build and design their climbing walls.

According to Mann, the building department then informed them of a required site development plan estimated at over $110,000 to put in landscaping and parking, and about $54,000 in capital expansion fees. This was in addition to the $150,000 worth of building improvements the gym owners had already planned, meaning about $314,000 of up-front capital was needed to invest in the building, which they did not own.

"The second time, they gave us all the information we needed, and we didn't understand it," Lum said. "The owner of the building said, 'We'll walk away if you don't sign the lease right now.'"

While the first lease had not resulted in a significant loss, the cost to terminate Wooden Mountain's second lease resulted in a total loss of close to 25 percent of the total capital they had invested in the project.

Mann and Lum were left feeling frustrated, and started looking at other locations for their gym, including Berthoud, Greeley, Windsor and Johnstown.

Mann, whose "day job" is work as the creative director for a small video production firm, produced a video for their website about the setback. The video featured a character called "Heel-Hook Harry" who opined that working with the city of Loveland to start a business was similar to having a sensitive body part slowly crushed in a vise.

"We can summarize our experience working with the city of Loveland as very confusing, frustrating and expensive," Mann wrote. "Early on, we hired professional architects, contractors, brokers, lawyers and business advisers to help us start this business ... Somehow, the city process and policies were able to trump what we thought was a bouldering gym dream team."

Lum said he and Mann lacked experience with starting a business, and were not aware they should have contacted the city's building department before signing a lease. But, he said, there was also an issue with communication on the city's end.

Mann and Lum said the issue was not with the city staff, who were empathetic and friendly, but that the staff could not help them work within or around the code.

"'Our hands are tied' was said over and over again," Lum said.

Mann and Lum have since found a new possible location for their gym that requires less additional work, as it is zoned as a gym already. This time around, they are going to take their time.

"We're trying to engage with the city early," Lum said.

Other businesses

The owners of Wooden Mountain Bouldering Gym are not the only entrepreneurs to struggle with the city's system.

Sara Turner owns the art bar and boutique Studio Vino, which has been located in downtown Loveland for seven years.

After the Studio Vino building's landlord passed away, the building sold, and Studio Vino had to relocate, Turner said.

After one downtown spot fell through, Turner set her sights on another building on East Fourth Street. But, a city requirement that the building owner install a new fire suppression system in the aging building led the building owner to sell it, and it was no longer an option.

"We tried to stay downtown," Turner said. "We were running into downtown buildings that just needed way too many requirements for us to be able to be there."

After another possible location for the studio opened up in Centerra, Turner was sad at the possibility of leaving downtown, but the buildings in Centerra were newer and could be less expensive, she said. But, Turner did not know at the time that the new space did not meet the international building code requirement for restrooms.

"As a small business owner, I didn't know anything about the IBC," Turner said. "Now I know a lot more."

Learning the code was not made easy, Turner said.

"I would call the building department, and try to ask a simple question," she said. "They would just refer me to go to the IBC on my own."

Turner found the fourth and final new space for Studio Vino again in Centerra — and, this time, it had enough bathrooms. All Turner needed to do was paint the walls and ceiling, and add a few cosmetic touches to the bathrooms, she said.

But, since Turner needed to allow people to assemble in the space for painting classes, the city required her to change the use of the space from simply retail to assembly and retail.

"It held us up majorly," Turner said. "We were doing a very minor tenant finish ... and we didn't understand why we had to go through the same building process that people building something new would. The whole reason we went to Centerra was because we thought we could throw on a fresh coat of paint and be on our way."

Though the Building Department offered an opportunity for Turner to sit down with them prior to entering the second Centerra space, Turner said she did not schedule a meeting since she thought she would only be painting the space. The holdup caused the studio to delay its Centerra opening from October to December, which meant they missed Black Friday and part of the holiday shopping season, Turner said.

The city

City staff say Loveland offers numerous resources to small business owners, but inexperienced entrepreneurs do not always know where and how to take advantage of them.

Kelly Jones, director of economic development for the city, wrote in an email to the Loveland Reporter-Herald that Loveland's Business Development Center is a primary city-funded resource for entrepreneurs and can provide guidance on regulations, strategy, financing options, marketing and cash flow projection.

If a business only needs to expand at their current site or is considering a site for their new business, they can go directly to the city's Development Services Center, where front desk staff can walk them through the required regulations. The city also offers free concept review sessions that soon-to-be business owners should attend to learn what to expect.

But, Jones wrote, entrepreneurs in general can be risk takers and often do not do due diligence when researching the costs, regulations and markets of their new business.

"Many entrepreneurs are not aware of (the city's) offerings or just dive in on their own and end up leasing a space that may not be allowed for their type of business, or the space requires major improvements in fire suppression, bathrooms, ADA, street or landscaping improvements, etc," Jones wrote.

Jones said multiple city departments plan to come together at the Jan. 27 annual City Council retreat to discuss initiatives to inform entrepreneurs of the city's resources.

Brett Limbaugh, director of development services, said he wished that people would come to him before signing leases. Warehouses in particular are tricky spaces to lease and transform because regulations for a storage space are less stringent than those for a space that will be occupied daily by scores of people, he said.

"We're one of those steps they should not skip," he said.

Limbaugh said his department has been coordinating with the economic development department to develop process improvements.

Loveland Mayor Jacki Marsh said she in particular wants to advocate for small businesses getting started in Loveland, and that she has been trying to "work behind the scenes."

Even though the council is intended as a policy body and is not permitted to intervene in the work of city staff, Marsh said she wants to help by hearing entrepreneurs' stories and sending them to the right place.

"We just have to do a better job of understanding the plight of small business owners," Marsh said. "Loveland and downtown Loveland is becoming a very desirable place for people to open a business. And some of our policies get in the way of making that happen. You can't fault a small business owner for not wanting to make a huge investment in a building they don't own."

In response to an email from Mann detailing more about Wooden Mountain's process, Marsh emailed the city attorney, Steve Adams, Jan. 5 to ask that city staff help the climbing gym come to fruition.

"Could you or someone you appoint please 'babysit' this one," Marsh wrote. "Evan and his partners will likely be under great pressure to sign a lease for the building while competing with other potential tenants for the space."

Councilor Don Overcash, who represents Ward IV, said city staff are working hard to improve the process and that they take citizen requests very seriously. However, Overcash said, council neither formally nor informally voted to direct Adams to help Wooden Mountain after hearing Mann's comments, and one councilor alone cannot direct the city manager to act.

"While we might be able to help businesses and simplify things, that night was not an indication of council consent," Overcash said.

However, the agenda for the council retreat was, for the first time, determined by members of council with city staff assistance, instead of by city staff alone, Overcash said. Council members elected for the city's small business environment to be a discussion topic at the retreat.

"We want to have a discussion about if there is anything else we can do to help facilitate the process," Overcash said. "And about how the city can take a more proactive approach... and help you figure out what you're doing."

Councilor Leah Johnson said she wants to look at ways the city can work with small business owners, perhaps with incentives or low-interest loans.

"How are we working with people to make things happen?" she asked. "Personally, I feel like we are moving in the right direction compared to six months ago."